My HGH
My HGH
From the 2025/26 tax year onwards, directors who are also shareholders in their own close companies face new disclosure obligations on their Self Assessment tax returns. The changes form part of a wider package introduced by the Government to give HMRC better visibility of how owner-managed businesses are remunerating their owners, and they will affect a very large population of UK taxpayers. From one-person personal service companies through to family trading groups.
What directors of close companies must now disclose
The new rules require shareholders in owner-managed businesses to provide, via their Self Assessment return, two pieces of information that were not previously called for in that form.
First, the amount of dividend income received from their own companies must be reported separately from other dividend income. Until now, dividends from a director-shareholder’s own company have typically been pooled with dividends from listed shares, collective investments and other portfolio holdings within a single dividend figure on the return; that aggregation will no longer be acceptable for 2025/26 onwards.
Second, the director-shareholder must now disclose the percentage share they hold in their own company where it was not required previously.
Interaction with other close company tax issues
Directors should also bear in mind that the new disclosures do not stand alone. Existing rules continue to apply to loans and advances to participators under sections 455 and 464A of the Corporation Tax Act 2010, which form part of the company tax return and which HMRC routinely reviews alongside the directors’ personal positions. Likewise, private expenses paid by the company on behalf of directors must continue to be properly characterised either as remuneration (with appropriate PAYE, NIC and benefits reporting), or as debits to the director’s loan account. The clearer picture of dividends provided by the new Self Assessment fields will make it easier for HMRC to test whether the overall remuneration mix declared by the director aligns with what the company’s records show.
How we can help
Our team advises a wide range of owner-managed businesses and their director-shareholders on Self Assessment compliance, profit extraction strategy, and HMRC enquiry management. If you would like to discuss how the 2025/26 changes affect your business, or to review your remuneration and dividend arrangements ahead of the new filing requirements, please get in touch with your usual contact.
Need Help? Get In Touch!
If you need help with director-shareholders on Self Assessment compliance, profit extraction planning, and HMRC enquiry support, contact us on 01904655202 or email enquiries@hghyork.co.uk
